Oil prices fell below $90 per barrel after Donald Trump suggested the US-Israeli war with Iran could end soon.
Oil price fell below $90 per barrel on Monday, after surging to nearly $120, following United States President Donald Trump’s remarks of a possible end to the war soon.
The prices of Brent crude and West Texas Intermediate went back below $90 a barrel. Wall Street stocks closed higher as oil prices eased.
Also, G7 finance ministers said the group “stands ready” to release petroleum from emergency reserves. Earlier on Monday, the oil price had surged to $119, the highest level since 2022.
Stocks rallied and oil fell after it was reported that Trump said the US-Israeli war with Iran was “very far ahead of schedule” and “very complete, pretty much.”
Brent crude, the global oil benchmark, slid below $90 a barrel after the president’s comments. It had surged overnight, hitting its highest intraday level since mid-2022. The US benchmark dropped to about $85 a barrel, after surging above $119 earlier.
Stocks opened the session lower, but pared declines as the oil slide moderated, then rallied into the close after Trump’s latest remarks. The Nasdaq composite led indexes with a gain of 1.4 per cent. The Dow industrials rose 239 points after being down almost 900 points in early trading.
One turning point came when France’s Finance Minister said the Group of Seven advanced economies was prepared to release strategic oil reserves to stabilise the global energy market if necessary. The remarks came after an extraordinary meeting of the group and as Gulf oil producers cut production amid shipping disruptions in the Strait of Hormuz.
The bond markets remained volatile, with the 10-year US Treasury yield pushing above 4.2 per cent before retreating back near 4.1 per cent. The dollar turned lower late in the day. Investors in recent days have feared that the energy-price spike could feed inflation and damp growth, raising the spectre of stagflation.
Trump on Monday warned that Iran made a “big mistake” by choosing Mojtaba Khamenei as its new supreme leader, as Washington accused Tehran of holding the world hostage through escalating military actions and threats to global energy supplies amid the expanding Middle East war.
Trump had repeatedly dismissed Iran’s new leader as unacceptable and suggested he would not last long without US approval, a remark that Iranian officials rejected as interference in the country’s internal political process. Also, Trump indicated on Monday that the ongoing war will be short-lived.
The leadership transition came days after the death of Ali Khamenei in US-Israeli strikes, an event that dramatically escalated tensions and triggered a succession process that culminated in the appointment of his son, Mojtaba, marking the first quasi-dynastic transfer of power in the Islamic Republic.
But Iran defended the appointment, with its political and military establishment calling for unity under the new leader as the war with Israel and its allies continued to intensify across the region.
The conflict had already disrupted energy shipments through the Strait of Hormuz and driven global oil prices sharply higher, raising fears of broader geopolitical and economic fallout if the war continued to spread beyond Iran and Israel.
Russia on Monday threw its weight behind Iran’s new leadership, with President Vladimir Putin congratulating Mojtaba Khamenei and pledging Moscow’s “unwavering support”.
Putin described Russia as a reliable partner for Tehran at a time when the country was facing what he called armed aggression.
British Prime Minister Keir Starmer warned that the conflict could have far-reaching economic consequences, cautioning that prolonged hostilities in the Middle East may disrupt global oil flows and place additional strain on already fragile international markets.